Update on the euro cash changeover

10 January 2002

The introduction of the euro banknotes and coins is progressing well. The total value of national banknotes in circulation declined by EUR 9.9 billion (4.7%) on 9 January 2002 to EUR 200.25 billion. This decrease is somewhat less than expected, mainly on account of the time needed for the return of national banknotes by users via credit institutions to their respective national central banks. Nevertheless, demand for euro banknotes is still high. In order to accommodate the resulting liquidity need of the banking system, the Eurosystem today supplied additional liquidity via a quick tender operation.

Around 8 billion euro banknotes are already in circulation and the euro progress ratio (EPR) rose from 45.5% on 8 January to 47.6% on 9 January 2002. This means that the value of euro banknotes in circulation amounts to 47.6% of the total value of all banknotes in circulation, including the national banknotes issued but not yet redeemed by national central banks.

The EPR calculates the value of euro banknotes in circulation divided by the total value of euro and national banknotes in circulation. It provides an indication of the rate of substitution of national banknotes by euro banknotes. It cannot be assimilated into figures on the number of transactions processed in euro.

With regard to the occasional comments on fears of price increases linked to the euro cash changeover, Professor Eugenio Domingo Solans, member of both the Governing Council and the Executive Board of the European Central Bank (ECB), stated his conviction "that, overall, competition as well as the professionalism of retailers will impede significant price increases."